# Accounting Ratios MCQ Questions for Class 12 Accountancy Chapter 10 with Answers

NCERTCOURSE.COM- Find here the NCERT/CBSE chapter-wise Multiple Choice Questions from Class 12 Accountancy book Chapter 10 Accounting Ratios with Answers Pdf free download. This may assist you to understand and check your knowledge about the chapters. Students also can take a free test of the Multiple Choice Questions of Accounting Ratios. Each question has four options followed by the right answer. These MCQ Questions are selected supported by the newest exam pattern as announced by CBSE.

## Q1. Current assets are those assets which are convertible into cash within:

(i) One month
(ii) 6 months
(iii) 12 months
(iv) none of these

(iii) 12 months

## Q2. Long term solvency is indicated by :

(i) Current Ratio
(ii) Quick Ratio
(iii) Net Profit Ratio
(iv) Debt/Equity Ratio

(iv) Debt/Equity Ratio

## Q3. Which one of the following ratios is most important in determining the long-term solvency of a company ?

(i) Profitability Ratio
(ii) Debt-Equity Ratio
(iii) Stock Turnover Ratio
(iv) Current Ratio

(ii) Debt-Equity Ratio

## Q4. Acid Test ratio comes under:

(i) Liquidity ratio
(ii) Solvency ratio
(iii) Profitability ratio
(iv) Activity ratio

(i) Liquidity ratio

## Q5. The solvency position of any firm is determined and measured with the help of

(i) None of the options
(ii) Activity Ratios
(iii) Profitability Ratios
(iv) Solvency ratios

(iv) Solvency ratios

## Q6. Proprietory Ratio indicates the relationship between proprietor’s funds and….

(i) Reserve
(ii) Share Capital
(iii) Total Assets
(iv) Debentures

(iii) Total Assets

## Q7. Which of the following will increase the current ratio where it is 2 : 1 ?

(i) Payment to creditors
(ii) Conversions of receivables into cash
(iii) Purchase of goods on credit
(iv) Purchase of goods for cash

(i) Payment to creditors

## Q8. The __ ratios are primarily measures of return :

(i) liquidity
(ii) activity
(iii) debt
(iv) profitability

(iv) profitability

## Q9. Profitability Ratios are generally expressed in :

(i) Simple Ratio
(ii) Percentage
(iii) Times
(iv) None of these

(ii) Percentage

## Q10. Long term solvency ratio is judged by which of the following ratio?

(i) Debt equity ratio
(ii) Total assets turnover ratio
(iii) Liquidity ratios
(iv) Operating ratio

(iii) Liquidity ratios

## Q11. The excess of Current ratio is also treated as a sign of managerial

(i) Inefficiency and Efficiency
(ii) Efficiency
(iii) Inefficiency
(iv) None of the options

(iii) Inefficiency

## Q12. The ratios are primarily measures of earning capacity of the business.

(i) Liquidity
(ii) Activity
(iii) Debt
(iv) Profitability

(iv) Profitability

## Q13. In debt equity ratio, debt refers to

(i) Short term debts
(ii) Total debts
(iii) Shareholders’funds
(iv) Long term borrowings and long term debts

(iv) Long term borrowings and long term debts

## Q14. The __ of business firm is measured by its ability to satisfy its short-term obligations as they become due :

(i) activity
(ii) liquidity
(iii) debt
(iv) profitability

(ii) liquidity

## Q15. Operating Ratio is:

(i) Profitability Ratio
(ii) Activity Ratio
(iii) Solvency Ratio
(iv) None of these

(i) Profitability Ratio

## Q16. Interest coverage is equal to

(i) Interest after interest but before tax / interest on debt
(ii) Interest before interest and tax / interest on debt
(iii) Interest after interest and debt / interest on debt
(iv) Interest on debt / Interest before interest and tax

(ii) Interest before interest and tax / interest on debt

(i) Rs 15000
(ii) Rs 18000
(iii) Rs 16000
(iv) Rs 20000

(ii) Rs 18000

## Q18. Which of the following non-operating expense?

(i) Rent
(ii) Selling Expenses
(iii) Wages
(iv) Loss on Sale of Machinery

(iv) Loss on Sale of Machinery

## Q19. Cost of revenue from operations is the difference between

(i) Revenue from operations + Gross Profit
(ii) Revenue from operations – Gross Profit
(iii) Revenue from operations – Net profit
(iv) Revenue from operations + Net Profit

(ii) Revenue from operations – Gross Profit

## Q20. The __ measures the activity of a firm’s inventory.

(i) average collection period
(ii) inventory turnover
(iii) liquid ratio
(iv) current ratio

(ii) Inventory turnover

## Q21. The term fixed assets include :

(i) Cash
(ii) Machinery
(iii) Debtors
(iv) Prepaid Expenses

(ii) Machinery

## Q22. Capital Employed is equal to

(i) Fixed Capital+Working Capital
(ii) Total Assets-Total Liabilities
(iii) Total Assets
(iv) Total Liabilities

(i) Fixed Capital+Working Capital

## Q23. When opening stock is ₹ 50,000 closing stock ₹ 60,000 and cost of goods sold is ₹ 2,20,000, then stock turn over ratio is:

(i) 2 times
(ii) 3 times
(iii) 4 times
(iv) 5 times

(iii) 4 times

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## MCQ Class 12 Accountancy with answers Part A & Part B

### 1 thought on “Accounting Ratios MCQ Questions for Class 12 Accountancy Chapter 10 with Answers”

1. MCQ MUTLIPLE CHOICE QUESTION ARE WELL SET TESTING THE IN DEPTH KNOWLEDGE OF THE STUDENT IN ACCOUNTING RATIOS.